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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-2.38 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -2.38 suggests that the company is not a manipulator.

FLEX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.74   Max: 1.16
Current: -2.38

-6.74
1.16

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 1.16. The lowest was -6.74. And the median was -2.50.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9762+0.528 * 0.9004+0.404 * 1.9763+0.892 * 0.9864+0.115 * 1.0483
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1824+4.679 * -0.0403-0.327 * 0.9877
=-2.38

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $2,058 Mil.
Revenue was 5876.813 + 5772.698 + 6763.177 + 6316.762 = $24,729 Mil.
Gross Profit was 405.995 + 406.337 + 452.467 + 396.916 = $1,662 Mil.
Total Current Assets was $8,421 Mil.
Total Assets was $12,509 Mil.
Property, Plant and Equipment(Net PPE) was $2,296 Mil.
Depreciation, Depletion and Amortization(DDA) was $535 Mil.
Selling, General & Admin. Expense(SGA) was $985 Mil.
Total Current Liabilities was $6,628 Mil.
Long-Term Debt was $2,693 Mil.
Net Income was 105.729 + 61.344 + 148.91 + 122.977 = $439 Mil.
Non Operating Income was -3.529 + -1.481 + -44.415 + -45.748 = $-95 Mil.
Cash Flow from Operations was 263.932 + 196.673 + 277.777 + 299.719 = $1,038 Mil.
Accounts Receivable was $2,137 Mil.
Revenue was 5566.248 + 5951.6 + 7025.054 + 6528.517 = $25,071 Mil.
Gross Profit was 352.341 + 378.817 + 408.657 + 377.081 = $1,517 Mil.
Total Current Assets was $9,080 Mil.
Total Assets was $12,100 Mil.
Property, Plant and Equipment(Net PPE) was $2,143 Mil.
Depreciation, Depletion and Amortization(DDA) was $529 Mil.
Selling, General & Admin. Expense(SGA) was $845 Mil.
Total Current Liabilities was $6,496 Mil.
Long-Term Debt was $2,632 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2057.943 / 24729.45) / (2137.255 / 25071.419)
=0.08321831 / 0.08524667
=0.9762

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1516.896 / 25071.419) / (1661.715 / 24729.45)
=0.060503 / 0.06719579
=0.9004

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8420.959 + 2296.445) / 12508.524) / (1 - (9080.227 + 2143.221) / 12100.18)
=0.14319195 / 0.07245611
=1.9763

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24729.45 / 25071.419
=0.9864

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(529.108 / (529.108 + 2143.221)) / (534.748 / (534.748 + 2296.445))
=0.19799508 / 0.18887727
=1.0483

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(985.051 / 24729.45) / (844.581 / 25071.419)
=0.03983311 / 0.033687
=1.1824

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2692.596 + 6627.703) / 12508.524) / ((2632.138 + 6496.228) / 12100.18)
=0.74511581 / 0.75439919
=0.9877

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(438.96 - -95.173 - 1038.101) / 12508.524
=-0.0403

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -2.38 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.95081.38450.5811.35120.9140.95611.01371.15320.86510.9367
GMI 0.99281.15431.03180.81930.90711.07611.04550.8970.93340.8975
AQI 0.94280.89740.26810.54170.75021.0181.59061.06471.08422.0798
SGI 1.23321.46171.1230.77911.17971.03170.80321.10771.00150.9339
DEPI 1.13440.77690.97890.91511.38680.89870.97211.22460.82191.1047
SGAI 0.9571.00841.08031.00580.8861.06091.14230.98070.96391.2108
LVGI 0.97511.14011.46190.96970.99060.98530.9661.05340.96840.9945
TATA 0.0125-0.0621-0.6506-0.0733-0.009-0.0304-0.0747-0.0621-0.0212-0.052
M-score -2.25-2.04-6.25-2.98-2.52-2.60-2.75-2.55-2.71-2.48

Flextronics International Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.15321.01240.91990.88040.86510.7941.09791.15480.93670.9762
GMI 0.8970.85510.84670.90890.93340.92570.90720.88370.89750.9004
AQI 1.06471.15131.24681.20151.08421.06151.61972.03762.07981.9763
SGI 1.10771.15291.14641.09081.00150.92990.91810.91370.93390.9864
DEPI 1.22461.17241.03740.84690.82190.86660.9871.05661.10471.0483
SGAI 0.98070.89010.85380.87080.96391.05551.10241.15121.21081.1824
LVGI 1.05341.00180.97790.97470.96840.97820.99640.99050.99450.9877
TATA -0.0578-0.0304-0.049-0.0138-0.0158-0.0565-0.0465-0.0359-0.0485-0.0403
M-score -2.53-2.45-2.60-2.53-2.68-3.03-2.50-2.24-2.46-2.38
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